Financial Technology

March 01, 2017

The Hon. D.W. RIDGWAY (Leader of the Opposition) (15:53): I rise today to make some comments around the FinTech industry and in particular Blockchain. Blockchain technology may not be something that many members of parliament are overly familiar with or have even heard about. This is an area that I have taken a keen interest in and it is something that I am excited about. It is something which I believe will play a significant role in South Australia's future, across a range of sectors.

For the uninitiated, and at the risk of oversimplifying it, ultimately, Blockchain is a secure, unhackable, distributed ledger that will allow for instantaneous peer-to-peer transactions using cryptocurrency. I should note that by summarising this complex technology into a single sentence I do Blockchain and its plethora of possibilities a great disservice.

So, what does this mean in practical terms? In practical terms, Blockchain will cut out the middleman and free up untold amounts of idle cash, reducing the time that money effectively spends in limbo. For instance, imagine if you could transfer funds directly to another person or business and not have to go through a bank. Or, on a stock exchange, imagine if you could trade shares instantly without the exchange holding the shares and the money while the transaction clears. That would mean these funds are not sitting in the coffers of another earning them interest. It means less fees and charges and, importantly, it means instant transfers. This is an exciting new technology that has untold possibilities.

Those who have heard of Blockchain may know that it is the next big thing, but they are not quite sure how it will evolve. A good analogy that I use to describe Blockchain is that, at the moment, it would be compared to where the internet was in the 1990s. Back then, we all knew that the internet was exciting but it appeared complex and foreign, and we never knew how much it would ultimately consume us. Nowadays, many of us could not imagine a world without the internet, especially younger generations.

As a South Australian member of parliament, my end goal in pursuing this exciting technology is for the betterment of South Australia. South Australia has a rich history of innovation and entrepreneurial spirit and these attributes will be fundamental to reinvigorate our economy. Blockchain, like the internet, is the next big technological advancement that South Australia needs to capitalise on. This technology has the potential to transform our economy, the way that we do business and it even has huge potential for governments.

Some of the potential benefits for South Australia and areas that South Australia could take the lead in utilising this technology include a range which I will go through briefly. Lands title: a South Australian invented the Torrens title and South Australia could easily lead the way with a new Blockchain-based conveyancing system. Water management and water trading: water rights and entitlements could be traded on Blockchain, reducing settlement rights on trades to less than one day, allowing for more efficient use of water.

Grain trading has already taken place. AgriDigital, a company in New South Wales, ran a successful pilot program last year and they traded 1.5 million tonnes, which is about 5 per cent of the nation's crop, using Blockchain technology. This has the potential to save the grain industry hundreds of millions of dollars nationwide every year.

Another area with a lot of potential is electricity microgrids. I know of a concept where you would have a chip in every solar panel on your roof, you would have a neighbourhood-based system where it would record, with a cryptocurrency, every electron that you produce on your property, it goes into the battery and then you pay for it when it leaves the battery. There are some opportunities to put some distributor generation around this state and to allow the benefits to go back to the person who owns the solar panel.

There is also a huge opportunity in the procurement process and cyber security aspects of defence. In government administration, the state of Delaware in America has progressively moved a whole bunch of government registers onto Blockchain and they are seeing some great advances in efficiency.

The state Liberal Party is aware of these possibilities and we are on the front foot. On Friday, our leader, Steven Marshall, will host a Blockchain summit at Adelaide Oval. In what can only be described as a massive coup for South Australia, we have secured two keynote speakers, Joseph Lubin and Chami Akmeemana, both world-leading pioneers in Blockchain technology, who have been described as the Bill Gates and Steve Jobs of this industry.

Our phones have been ringing hot and we have been inundated with interest from a broad cross-section of industries, including banks, universities, accounting firms, and even interstate and overseas guests who are coming to listen to this sold-out event at Adelaide Oval. I will also be attending the world Blockchain Conference in Washington DC later this month and look forward to bringing those benefits back to South Australia.